Marcus & Millichap

Southwest Hospitality Investment Forecast

First Half 2019

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Tourism Flourishes Through Most of the Southwest, Boosting Occupancy Rates

Travel for pleasure in Arizona and New Mexico lifts occupancy rates considerably, leading regional growth. Rising visitation levels throughout the Southwest have generated strong occupancy improvement and RevPAR increases throughout the region in recent years. Arizona and New Mexico, in particular, have fueled a large portion of this tremendous growth. Both will lead the region this year, each posting occupancy increases above 100 basis points and driving healthy RevPAR gains. Colorado will also generate a modest increase in occupancy as the state’s recreational activities attract travelers. Despite elevated room demand in these three states, declining room nights in Nevada and Utah will subdue increases in regional occupancy and RevPAR again this year. Nevada will generate the largest losses. Supply pressures, rising resort fees and parking costs that frustrate travelers cut into occupancy rates and decline revenues.

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